Opinion
Case No.: 22-cv-00676-H-MSB
2023-03-27
FATE THERAPEUTICS, INC.; and Whitehead Institute for Biomedical Research, Plaintiffs, v. SHORELINE BIOSCIENCES, INC.; and Dan S. Kaufman, Defendants.
Aimee Housinger, Pro Hac Vice, Greenberg Traurig, LLP, Houston, TX, Brent Douglas Sokol, Lisa Christine McCurdy, Greenberg Traurig, LLP, Los Angeles, CA, Danielle Marie Zapata, Pro Hac Vice, Giancarlo Luca Scaccia, Pro Hac Vice, Jonathan David Ball, Pro Hac Vice, Jeffrey Ray Colin, Pro Hac Vice, Rose Cordero Prey, Pro Hac Vice, Greenberg Traurig, LLP, New York, NY, Daniel Doft, Duane Morris LLP, San Diego, CA, Joseph Thomas Ergastolo, Wright, L'Estrange & Ergastolo, San Diego, CA, for Plaintiffs. Eric Martin Acker, Brian M. Kramer, Wesley W.l. Chen, Drew Alan Hillier, Sarah Jane Vandervalk, Morrison & Foerster LLP, San Diego, CA, Jose Luis Ramos, Hooper, Lundy & Bookman, P.C., San Diego, CA, Michael Allen Jacobs, Morrison and Foerster LLP, San Francisco, CA, for Defendant Shoreline Biosciences, Inc. Justin T. Goodwin, Dto Law, Los Angeles, CA, Nicole G. Malick, Delgado Tarango O'Neill LLP, Los Angeles, CA, Robin Assaf Wofford, Jason Michael Avelar, Wilson Turner Kosmo LLP, San Diego, CA, Sudip Kundu, Pro Hac Vice, Dto Law, New York, NY, for Defendant Dan S. Kaufman. Molly A. Jones, Crowell & Moring LLP, San Francisco, CA, for Amicus Lonza Walkersville, Inc.
Aimee Housinger, Pro Hac Vice, Greenberg Traurig, LLP, Houston, TX, Brent Douglas Sokol, Lisa Christine McCurdy, Greenberg Traurig, LLP, Los Angeles, CA, Danielle Marie Zapata, Pro Hac Vice, Giancarlo Luca Scaccia, Pro Hac Vice, Jonathan David Ball, Pro Hac Vice, Jeffrey Ray Colin, Pro Hac Vice, Rose Cordero Prey, Pro Hac Vice, Greenberg Traurig, LLP, New York, NY, Daniel Doft, Duane Morris LLP, San Diego, CA, Joseph Thomas Ergastolo, Wright, L'Estrange & Ergastolo, San Diego, CA, for Plaintiffs. Eric Martin Acker, Brian M. Kramer, Wesley W.l. Chen, Drew Alan Hillier, Sarah Jane Vandervalk, Morrison & Foerster LLP, San Diego, CA, Jose Luis Ramos, Hooper, Lundy & Bookman, P.C., San Diego, CA, Michael Allen Jacobs, Morrison and Foerster LLP, San Francisco, CA, for Defendant Shoreline Biosciences, Inc. Justin T. Goodwin, Dto Law, Los Angeles, CA, Nicole G. Malick, Delgado Tarango O'Neill LLP, Los Angeles, CA, Robin Assaf Wofford, Jason Michael Avelar, Wilson Turner Kosmo LLP, San Diego, CA, Sudip Kundu, Pro Hac Vice, Dto Law, New York, NY, for Defendant Dan S. Kaufman. Molly A. Jones, Crowell & Moring LLP, San Francisco, CA, for Amicus Lonza Walkersville, Inc.
ORDER DENYING DEFENDANT SHORELINE'S MOTION FOR PARTIAL SUMMARY JUDGMENT
MARILYN L. HUFF, District Judge
On January 27, 2023, Defendant Shoreline Biosciences, Inc. ("Shoreline") filed a motion for partial summary judgment. (Doc. No. 127.) On February 13, 2023, the Court ordered supplemental briefing on an additional issue related to Shoreline's motion. (Doc. No. 153.) On February 13, 2023, Plaintiffs Fate Therapeutics, Inc. ("Fate") and Whitehead Institute for Biomedical Research ("Whitehead") filed a response in opposition to Shoreline's motion for summary judgment. (Doc. No. 154.) On February 17, 2023, Shoreline filed its reply. (Doc. No. 174.) On February 21, 2023, the parties filed their respective supplemental briefs. (Doc. Nos. 181, 186.) On March 13, 2023, Plaintiffs filed a notice of supplemental authority. (Doc. No. 223.)
The Court held a hearing on the matter on February 27, 2023. Jonathan D. Ball, Rose C. Prey, Giancarlo L. Scaccia, Danielle M. Zapata, and Joseph T. Ergastolo appeared for Plaintiffs. Eric M. Acker, Drew A. Hillier, and Sarah J. Vandervalk appeared for Defendant Shoreline. Sudip Kundu and Nicol Malick appeared for Defendant Dan S. Kaufman. For the reasons below, the Court denies Shoreline's motion for partial summary judgment.
Background
In the present action, Plaintiffs assert claims for patent infringement under 35 U.S.C. §§ 271(a), (b), and (g) against Defendants Shoreline and Dan S. Kaufman, alleging claims for infringement of U.S. Patent Nos. 8,071,369 ("the '369 Patent"), 8,932,856 ("the '856 Patent"), 8,951,797 ("the '797 Patent"), 8,940,536 ("the '536 Patent"), 9,169,490 ("the '490 Patent"), 10,457,917 ("the '917 Patent"), and 10,017,744 ("the '744 Patent") (collectively, "the asserted patents"). (Doc. No. 162, Supp. FAC ¶¶ 157-414.) Specifically, Plaintiffs allege that Defendants, individually and acting in concert, make, use, sell, offer for sale, and/or import induced pluripotent stem cells ("iPSCs") that infringe one or more claims of the asserted patents. (Id.¶ 140; see, e.g., id. ¶ 162 ("Defendants' use of their 'iPSC-derived cell therapy manufacturing platform' infringed at least claim 1 of the '369 Patent."), ¶ 212 ("iPSCs used by Defendants to make at least the iPSC-derived natural kill (NK) cell platforms are made by a process that comprises at least each step of claim 1 of the '856 Patent.").)
Induced pluripotent stem cells ("iPSCs") "are pluripotent stem cells generated from somatic cells by reprogramming." (Doc. 162, Supp. FAC ¶ 31; see Doc. No. 184, Answer to Supp. FAC ¶ 31; see also Doc. No. 151-14, Plath Decl. ¶ 59; Doc. No. 152, Snyder Decl. ¶ 43.) "Four specific genes—cMYC, OCT3/4, SOX2 and KLF4—encoding transcription factors play a role in converting or reprogramming somatic cells into pluripotent stem cells." (Doc. 162, Supp. FAC ¶ 32; see Doc. No. 184, Answer to Supp. FAC ¶ 32; Doc. No. 199, Answer to Supp. FAC ¶ 32; see also Doc. No. 184, Counterclaims ¶ 43 ("iPSCs are generated in culture from somatic cells through the introduction of reprogramming factors that transform a somatic cell into a pluripotent state."); Doc. No. 152, Snyder Decl. ¶¶ 41, 43.)
Plaintiff Whitehead is the owner via assignment of the asserted patents. See U.S. Patent No. 8,071,369, at [73] (issued Dec. 6, 2011); U.S. Patent No. 8,932,856, at [73] (issued Jan. 13, 2015); U.S. Patent No. 8,951,797, at [73] (issued Feb. 10, 2015); U.S. Patent No. 8,940,536, at [73] (issued Jan. 27, 2015); U.S. Patent No. 9,169,490, at [73] (issued Oct. 27, 2015); U.S. Patent No. 10,017,744, at [73] (issued Jul. 10, 2018); U.S. Patent No. 10,457,917, at [73] (issued Oct. 29, 2019). Plaintiffs allege that Fate is the exclusive licensee of the asserted patents. (Doc. No. 162, Supp. FAC ¶¶ 16, 19.)
The '369 Patent is entitled "Compositions for reprogramming somatic cells" and was issued on December 6, 2011. '369 Patent at [45], [54]. The '856 Patent is entitled "Methods for reprogramming somatic cells" and was issued on January 13, 2015. '856 Patent at [45], [54]. The '797 Patent is entitled "Compositions for identifying reprogramming factors" and was issued on February 10, 2015. '797 Patent at [45], [54]. The '536 Patent is entitled "Methods for making somatic cells more susceptible to reprogramming" and was issued on January 27, 2015. '536 Patent at [45], [54]. The '490 Patent is entitled "Methods for reprogramming somatic cells" and was issued on October 27, 2015.-'490 Patent at [45], [54]. The '744 Patent is entitled "Methods for reprogramming somatic cells" and was issued on Jul. 10, 2018. '744 Patent at [45], [54]. The '917 Patent is entitled "Methods for reprogramming somatic cells" and was issued on October 29, 2019. '917 Patent at [45], [54].
The asserted patents are all related and all share a common specification. (See Doc. No. 149 at 5 & n.2; Doc. No. 151 at 2 & n.2 (agreeing that the asserted patents all share the same specification); see also Doc. No. 162, Supp. FAC ¶ 132.) The shared specification states that the disclosed invention is directed to "methods for reprogramming somatic cells to a less differentiated state." '369 Patent col. 2 ll. 24-25; see also id. at [57] ("The invention provides methods for reprogramming somatic cells to generate multipotent or pluripotent cells.").
The Court will cite to the '369 Patent's specification as the "shared specification" of the asserted patents.
The asserted method patents are the '856 Patent, the '536 Patent, the '744 Patent, and the '917 Patent. Independent claim 1 of the '856 Patent claims:
A method of making a somatic cell more susceptible to reprogramming to a pluripotent state comprising introducing at least one exogenous nucleic acid encoding Oct4 operably linked to at least one regulatory sequence into the cell, thereby increasing expression of Oct4 protein in the somatic cell, wherein increased expression of Oct4 protein makes the cell more susceptible to reprogramming to a pluripotent state.'856 Patent col. 20 ll. 38-44.
Independent claim 1 of the '536 Patent claims:
A method of making a primary somatic cell more susceptible to reprogramming to a less differentiated state, comprising: introducing an exogenous nucleic acid encoding an Oct4 protein operably linked to at least one regulatory sequence into the somatic cell, wherein expression of the exogenously introduced nucleic acid results in making the somatic cell more susceptible to reprogramming to a less differentiated state.'536 Patent col. 20 ll. 37-44.
Independent claim 1 of the '744 Patent claims:
A method of making a somatic cell more susceptible to reprogramming to a cell having a less differentiated state, comprising:
'744 Patent col. 21 ll. 14-23.obtaining a somatic cell that comprises an exogenously introduced polynucleic acid encoding Oct4 protein, and an exogenously introduced polynucleic acid encoding Sox2 or Nanog protein;
wherein the exogenously introduced polynucleic acids result in making the somatic cell more susceptible to reprogramming to a less differentiated state.
Independent claim 1 of the '917 Patent claims:
A method of making a somatic cell more susceptible to reprogramming to a less differentiated state, comprising: introducing an exogenous nucleic acid encoding an Oct4 protein operably linked to at least one regulatory sequence into the somatic cell, thereby increasing expression of Oct4 protein in the somatic cell, wherein increased expression of Oct4 protein makes the cell more susceptible to reprogramming; and wherein the exogenous nucleic acid is transiently transfected into the somatic cell.'917 Patent col. 21 ll. 16-24.
On May 13, 2022, Plaintiffs filed a complaint against Defendants, alleging claims for infringement of the '369 Patent, the '856 Patent, the '797 Patent, the '536 Patent, the '490 Patent, and the '917 Patent. (Doc. No. 1, Compl. ¶¶ 66-236.) On August 12, 2022, the Court issued a scheduling order. (Doc. No. 51.) On January 3, 2023, Plaintiffs filed a first amended complaint against Defendants, adding a claim for infringement of the '744 Patent. (Doc. No. 112, FAC ¶¶ 375-414.) On January 10, 2023, the Court issued an amended scheduling order. (Doc. No. 115.)
On February 14, 2023, Plaintiffs filed a supplemental first amended complaint - the operative complaint. (Doc. No. 162, Supp. FAC.) On February 17 and 23, 2023, Defendants filed answers and counterclaims to Plaintiffs' supplemental first amended complaint. (Doc. Nos. 184, 199.) On February 28, 2023, the Court issued a claim construction order construing disputed claim terms from the asserted patents. (Doc. No. 208.)
By the present motion, Shoreline moves for partial summary judgment that its use of iPSCs manufactured by Lonza Walkersville, Inc. ("Lonza") does not infringe the asserted method patents under 35 U.S.C. § 271(g). (Doc. No. 146 at 1; Doc. No. 181 at 1.) Specifically, Shoreline argues that it is entitled to summary judgment of Plaintiffs' § 271(g) claims because § 271(g) does not apply to domestically manufactured products. (Doc. No. 181 at 1, 10.) In addition, Shoreline argues that it is entitled to summary judgment that its affirmative defense under 28 U.S.C. § 1498 bars Plaintiffs from suing it under 35 U.S.C. § 271(g) based on the Lonza line of iPSCs. (Doc. No. 146 at 9-11.)
Discussion
I. Legal Standards Governing Summary Judgment
Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the moving party demonstrates "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are facts that, under the governing substantive law, may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).
A party seeking summary judgment always bears the initial burden of demonstrating that there is no genuine dispute as to any material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. A moving party without the ultimate burden of proof at trial can satisfy its burden in two ways: (1) by presenting "evidence negating an essential element of the nonmoving party's claim or defense;" or (2) by demonstrating "that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial." Nissan Fire & Marine Ins. Co. v. Fritz Companies, Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). Once the moving party establishes the absence of a genuine dispute as to any material fact, the burden shifts to the nonmoving party to "set forth, by affidavit or as otherwise provided in Rule 56, 'specific facts showing that there is a genuine issue for trial.' " T.W. Elec. Serv., 809 F.2d at 630 (quoting former Fed. R. Civ. P. 56(e)); accord Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007). To carry this burden, the non-moving party "may not rest upon mere allegation or denials of his pleadings." Anderson, 477 U.S. at 256, 106 S.Ct. 2505; see also Behrens v. Pelletier, 516 U.S. 299, 309, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996) ("On summary judgment, . . . the plaintiff can no longer rest on the pleadings."). Rather, the nonmoving party "must present affirmative evidence . . . from which a jury might return a verdict in his favor." Anderson, 477 U.S. at 256, 106 S.Ct. 2505.
When ruling on a summary judgment motion, the court must view the facts and draw all reasonable inferences in the light most favorable to the non-moving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). The court should not weigh the evidence or make credibility determinations. See Anderson, 477 U.S. at 255, 106 S.Ct. 2505. "The evidence of the non-movant is to be believed." Id. Further, the court may consider other materials in the record not cited to by the parties, but it is not required to do so. See Fed. R. Civ. P. 56(c)(3); see also Simmons v. Navajo Cnty., 609 F.3d 1011, 1017 (9th Cir. 2010) ("[A] district court has no independent duty 'to scour the record in search of a genuine issue of triable fact.' ").
II. Plaintiffs' Claim for Infringement Under 35 U.S.C. § 271(g)
In the operative complaint, Plaintiffs allege that Defendants infringe the asserted method patents - the '856 Patent, the '536 Patent, the '744 Patent, and the '917 Patent - under 35 U.S.C. § 271(g). (Doc. No. 162, Supp. FAC ¶¶ 211-14, 283-86, 356-59, 396-99.) In support of their § 271(g) claims, Plaintiffs allege that "Lonza [Walkersville, Inc.] and/or other third parties make iPSCs using the process[es] patented in [the asserted method patents], and Defendants have purchased or otherwise obtained such iPSC lines that were created by Lonza and/or other third parties." (Id.¶¶ 213, 285, 358, 398; see also Doc. No. 197, Exs. B, D, F, G (Plaintiffs' infringement contentions).) Plaintiffs further allege that Defendants use these iPSCs "to make at least the iPSC-derived natural killer (NK) cell platforms." (Doc. No. 162, Supp. FAC ¶¶ 212, 284, 357, 397; see also Doc. No. 197, Exs. B, D, F, G.)
In its motion, Shoreline presents evidence that the Lonza line of iPSCs was manufactured in Walkersville, Maryland. (See Doc. No. 127-3, Baghbaderani Decl. ¶¶ 5, 6, Ex. A at 11, 13, Ex. D at 92, 94; see also Doc. No. 162, Supp. FAC ¶ 54 ("The GMP-grade iPSC lines that Shoreline obtained from NHCDR were made by Lonza Walkersville, Inc. ('Lonza iPSCs').").) Plaintiffs do not dispute this evidence. (See generally Doc. No. 186.)
In light of this evidence, Shoreline argues that it is entitled to summary judgment that its use of the Lonza line of iPSCs does not infringe the asserted method patents - the '856 Patent, the '536 Patent, the '744 Patent, and the '917 Patent - under § 271(g) because § 271(g) does not apply to domestically manufactured products. (Doc. No. 181 at 1-10.) Plaintiffs dispute this and argue that § 271(g) applies to both foreign and domestically manufactured products. (Doc. No. 186 at 1-10.)
Section 271(g) of the Patent Act provides:
Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product. A product which is made by a patented process will, for purposes of this title, not be considered to be so made after—
(1) it is materially changed by subsequent processes; or
(2) it becomes a trivial and nonessential component of another product.
By its terms, "Section 271(g) prohibits the unauthorized importation into the United States, or sale or use within the United States, of a 'product which is made by a process patented in the United States.' " Momenta Pharms., Inc. v. Teva Pharms. USA Inc., 809 F.3d 610, 615 (Fed. Cir. 2015) (quoting 35 U.S.C. § 271(g)) (emphasis removed); see Syngenta Crop Prot., LLC v. Willowood, LLC, 944 F.3d 1344, 1359 (Fed. Cir. 2019) (Section 271(g) "makes clear that the acts that give rise to liability under § 271(g) are the importation, offer for sale, sale, or use within this country of a product that was made by a process patented in the United States."). The "principal purpose" of § 271(g) is "to prevent a patent owner's competitors from avoiding the patent by producing products outside the United States and then importing them." Mycogen Plant Sci., Inc. v. Monsanto Co., 252 F.3d 1306, 1318 (Fed. Cir. 2001), judgment vacated on other grounds by 535 U.S. 1109, 122 S.Ct. 2324, 153 L.Ed.2d 153 (2002); see Syngenta, 944 F.3d at 1362 ("§ 271(g) was enacted to 'extend protection to the products' resulting from practicing a patented process and to 'prevent circumvention of a U.S. process patentee's rights through manufacture abroad and subsequent importation into the United States of products made by the patented process.' " (emphasis added by Federal Circuit) (quoting S. Rep. No. 83, 100th Cong., 1st Sess., 46, 48 (1987))); Syngenta, 944 F.3d at 1363 ("Congress made clear that § 271(g) 'is prompted by the use of patented processes in other countries followed by the importation of the resulting products into this country,' and simply 'extend[s] protection to the products' made by such processes." (emphasis added by Federal Circuit) (quoting S. Rep. 100-83, at 46)).
District courts are split on the issue of whether 35 U.S.C. § 271(g) applies to domestically manufactured products. Compare Zond, Inc. v. SK Hynix Inc., No. CIV.A. 13-11570-RGS, 2014 WL 346008, at *4 (D. Mass. Jan. 31, 2014); Momenta Pharms., Inc. v. Amphastar Pharms., Inc., 962 F. Supp. 2d 348, 353 (D. Mass. 2013); Pat. Harbor, LLC v. Twentieth Century Fox Home Ent. LLC, No. 6:10CV607 LED-JDL, 2012 WL 12842299, at *2-3 (E.D. Tex. Sept. 7, 2012); Asahi Glass Co. v. Guardian Indus. Corp., 813 F. Supp. 2d 602, 614 (D. Del. 2011); Bos. Sci. Corp. v. Johnson & Johnson, 534 F. Supp. 2d 1062, 1081 (N.D. Cal. 2007); Monsanto Co. v. Syngenta Seeds, Inc., 431 F. Supp. 2d 482, 487 (D. Del. 2006), aff'd, 503 F.3d 1352 (Fed. Cir. 2007); Brit. Telecomm. v. SBC Commc'ns Inc., No. CIV. 03-526 SLR, 2004 WL 5264272, at *3 (D. Del. Feb. 24, 2004); Hughes Aircraft Co. v. Nat'l Semiconductor Corp., 857 F. Supp. 691, 697-99 (N.D. Cal. 1994); with Genentech, Inc. v. Amgen Inc., No. CV 17-1407-CFC, 2020 WL 708433, at *1 (D. Del. Feb. 12, 2020); Kyowa Hakka Bio, Co. v. Ajinomoto Co., No. CV 17-313, 2018 WL 834583, at *8-9 (D. Del. Feb. 12, 2018); United Gen. Supply Co. v. 2nds in Bldg. Materials, Inc., No. CV 15-1975, 2017 WL 524720, at *2 (W.D. La. Feb. 7, 2017); McRO, Inc. v. Namco Bandai Games Am., Inc., 23 F. Supp. 3d 1113, 1119-21 (C.D. Cal. 2013); Designing Health, Inc. v. Erasmus, No. CV 98-4758 LGB, 2002 WL 34536686, at *9 n.6 C.D. Cal. Feb. 26, 2002; Avery Dennison Corp. v. UCB Films PLC, No. 95 C 6351, 1997 WL 665795, at *1 & n.2 (N.D. Ill. Oct. 20, 1997); Shamrock Techs., Inc. v. Precision Micron Powders Inc., No. CV 91-0869, 1991 WL 335362, at *2 (E.D.N.Y. Aug. 8, 1991); see also Momenta Pharms., Inc. v. Teva Pharms. USA Inc., 809 F.3d 610, 622 n.1 (Fed. Cir. 2015) (Dyk, J., dissenting); Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1369 (Fed. Cir. 2009) (en banc) (Newman, J., dissenting); SGS-Thomson Microelectronics, Inc. v. Int'l Rectifier Corp., 1994 WL 374529 (Table), at *10 (Fed. Cir., Jul. 14, 1994) (Plager, J., concurring). Whether § 271(g) applies to domestically manufactured products is an issue of statutory interpretation. Statutory interpretation of the Patent Act is an issue governed by Federal Circuit law. See Egenera, Inc. v. Cisco Sys., Inc., 972 F.3d 1367, 1378 (Fed. Cir. 2020).
In its briefing, Shoreline cites to the district court case AntiCancer, Inc. v. Pfizer Inc., No. 11CV107 JLS, 2012 WL 13180611, at *2-3 S.D. Cal. June 1, 2012, and asserts that it is a case where the district court held that § 271(g) does not apply to domestically manufactured products. (Doc. No. 181 at 5.) The Court disagrees. There is no language in the AntiCancer decision expressly holding that § 271(g) does not apply to domestically manufactured products. See generally 2012 WL 13180611, at *2-3. In AntiCancer, the district court noted that "Section 271(g) 'sets forth a basis for infringement in situations where the patented process is used abroad, but where the product made by the patented process is imported, sold or used within the United States.' " Id. at *2 (quoting CNET Networks, Inc. v. Etilize, Inc., 528 F. Supp. 2d 985, 992 (N.D. Cal. 2007)). But there is no language in AntiCancer stating that § 271(g) is limited to only situations where the patented process is used abroad. And such a holding was not necessary in AntiCancer as the plaintiff conceded that the defendants neither used, sold, or offered to sell the products at issue made by the patented process, mouse models, in the United States and there were no allegations in the complaint that the defendants imported the mouse models into the United States. See id. at *2.
"As in all statutory construction cases," the court begins "with the language of the statute." Barnhart v. Sigmon Coal Co., 534 U.S. 438, 450, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002); accord Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 171, 136 S.Ct. 1969, 195 L.Ed.2d 334 (2016); Syngenta, 944 F.3d at 1359. "The first step is 'to determine whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case.' " Barnhart, 534 U.S. at 450, 122 S.Ct. 941 (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 340, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997)); accord Facebook, Inc. v. Windy City Innovations, LLC, 973 F.3d 1321, 1330 (Fed. Cir. 2020). "The meaning of statutory language 'is determined by reference to the language itself, the specific context in which that language is used, and the broader context of the statute as a whole.' " Syngenta, 944 F.3d at 1359 (quoting Robinson, 519 U.S. at 340, 117 S.Ct. 843); accord Yates v. United States, 574 U.S. 528, 537, 135 S.Ct. 1074, 191 L.Ed.2d 64 (2015). "In patent law, as in all statutory construction, [u]nless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 553, 134 S.Ct. 1749, 188 L.Ed.2d 816 (2014) (internal quotation marks omitted) (quoting Bilski v. Kappos, 561 U.S. 593, 603, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010)).
The "inquiry into the meaning of the statute's text ceases when 'the statutory language is unambiguous and the statutory scheme is coherent and consistent.' " Matal v. Tam, 582 U.S. 218, 232, 137 S.Ct. 1744, 198 L.Ed.2d 366 (2017) (quoting Barnhart, 534 U.S. at 450, 122 S.Ct. 941); see Babb v. Wilkie, — U.S. —, 140 S. Ct. 1168, 1177, 206 L.Ed.2d 432 (2020) ("where, as here, the words of [a] statute are unambiguous, the judicial inquiry is complete" (internal quotation marks omitted)); Bostock v. Clayton Cnty., Georgia, — U.S. —, 140 S. Ct. 1731, 1750, 207 L.Ed.2d 218 (2020) ("legislative history can never defeat unambiguous statutory text"). But if the statutory language does not clearly resolve the disputed issue, the court may also consider the legislative history to determine Congressional intent. Syngenta, 944 F.3d at 1359 (citing Burlington N. R. Co. v. Oklahoma Tax Comm'n, 481 U.S. 454, 461, 107 S.Ct. 1855, 95 L.Ed.2d 404 (1987)); see also Bostock, 140 S. Ct. at 1749 ("[S]ome Members of this Court have consulted legislative history when interpreting ambiguous statutory language.").
The Court begins its analysis of this issue with the plain language of the statute. See Barnhart, 534 U.S. at 450, 122 S.Ct. 941; Kingdomware, 579 U.S. at 171, 136 S.Ct. 1969. By its plain terms, § 271(g) encompasses products that are "import[ed] into the United States" and products that are "offer[ed]" for sale, "s[old]," or "use[d] within the United States." 35 U.S.C. § 271(g). There is no express language in § 271(g) limiting its provisions to foreign-made products, and there is no language in § 271(g) excluding domestically manufactured products. See Momenta, 809 F.3d at 622 n.1 (Dyk, J., dissenting) ("the plain language of § 271(g) admits of no such geographic limitation"); McRO, 23 F. Supp. 3d at 1118 ("The plain language of the statute is not limited to circumstances in which the manufacture of the product via an infringing process is performed abroad."); Kyowa Hakka, 2018 WL 834583, at *8 (same).
This conclusion is supported by the fact that § 271(g) "is phrased in the disjunctive and establishes liability for whomever, without authority, either (a) imports into the United States or (b) offers to sell, sells, or uses within the United States, a product which is made by a process patented in the United States." Kyowa Hakka, 2018 WL 834583, at *8; see United Gen. Supply, 2017 WL 524720, at *3. The Supreme Court has explained that when a list of terms or provisions in a statute is disjunctive, a court should not " 'rob' any one of them 'of its independent and ordinary significance.' " Graham Cnty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 288, 130 S.Ct. 1396, 176 L.Ed.2d 225 (2010) (quoting Reiter v. Sonotone Corp., 442 U.S. 330, 338-39, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979)); see Garcia v. United States, 469 U.S. 70, 73, 105 S.Ct. 479, 83 L.Ed.2d 472 (1984) ("Canons of construction indicate that terms connected in the disjunctive in this manner be given separate meanings."); Reiter, 442 U.S. at 339, 99 S.Ct. 2326 ("Canons of construction ordinarily suggest that terms connected by a disjunctive be given separate meanings, unless the context dictates otherwise."). As such, the Court should not "rob" the terms in the phrase "offers to sell, sells, or uses within the United States a product" of their independent and ordinary meanings by limiting those provisions to foreign-made products. See McRO, 23 F. Supp. 3d at 1118-19 ("Th[e] acts [in § 271(g)] are listed in the disjunctive and are thus independent acts of infringement.").
Shoreline argues that § 271(g) must be read within the context of § 271 as a whole, including § 271(a). (Doc. No. 181 at 1-3.) Shoreline contends that interpreting § 271(g) to include domestically manufacturer products would create unwarranted overlap between § 271(a) and (g). (Id. at 2-3.) The Court agrees with Shoreline that § 271(g) must be read in conjunction with § 271(a). See W. Virginia v. Env't Prot. Agency, 597 U.S. 697, 142 S. Ct. 2587, 2607, 213 L.Ed.2d 896 (2022) (" 'It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.' "); Gundy v. United States, — U.S. —, 139 S. Ct. 2116, 2126, 204 L.Ed.2d 522 (2019) (same). But there is no overlap between these two sections. Section 271(a) provides: "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States . . . infringes the patent." 35 U.S.C. § 271(a). The Federal Circuit has explained that unlike § 271(a), "liability under § 271(g) is not predicated on practicing the claimed process, but rather on importing, offering for sale, selling, or using a product." Syngenta, 944 F.3d at 1360. As such, § 271(g) addresses a different form of infringement and does not overlap with acts covered by § 271(a).
Shoreline notes that § 271(g) expressly states that the process at issue must be "patented in the United States" and argues that this language would not be necessary if the intent of Congress was to capture domestic activity. (Doc. No. 181 at 2.) The Court rejects this argument. That the process at issue must be one that is "patented in the United States" says nothing about whether that process must be performed in the United States or in a foreign country. Because there is no clear language in § 271(g) limiting it to one or the other, the clear implication of the language in § 271(g) is that the process at issue can be performed in either the United States or a foreign country.
In sum, a review of the plain language of § 271(g) demonstrates that it unambiguously is not limited to foreign-made products. Further, because the statutory language is unambiguous and the statutory scheme is consistent, the Court's inquiry into the meaning of § 271(g) must now cease. See Matal, 582 U.S. at 232, 137 S.Ct. 1744; Barnhart, 534 U.S. at 450, 122 S.Ct. 941.
Shoreline suggests that the Court should also examine the legislative history in interpreting § 271(g). (Doc. No. 181 at 3-7.) The Court acknowledges that the Federal Circuit has held: "[E]ven when the plain meaning of the statutory language in question would resolve the issue before the court, the legislative history should usually be examined at least 'to determine whether there is a clearly expressed legislative intention contrary to the statutory language." Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392, 395 (Fed. Cir. 1990) (quoting Madison Galleries, Ltd. v. United States, 870 F.2d 627, 629 (Fed. Cir. 1989)); see, e.g., Sunoco, Inc. v. United States, 908 F.3d 710, 717 (Fed. Cir. 2018) (examining legislative history even though plain meaning of statute was clear); Heinzelman v. Sec'y of Health & Hum. Servs., 681 F.3d 1374, 1379-80 (Fed. Cir. 2012) (same); Bartels Tr. for benefit of Cornell Univ. ex rel. Bartels v. United States, 617 F.3d 1357, 1361 (Fed. Cir. 2010) (same); Sharp v. United States, 580 F.3d 1234, 1238 (Fed. Cir. 2009); Bull v. United States, 479 F.3d 1365, 1377 (Fed. Cir. 2007) (same). But the Supreme Court "has explained many times over many years that, when the meaning of the statute's terms is plain, [the court's] job is at an end." Bostock, 140 S. Ct. at 1750; see, e.g., Babb, 140 S. Ct. at 1177 ("where, as here, the words of [a] statute are unambiguous, the judicial inquiry is complete"); Nat'l Ass'n of Mfrs. v. Dep't of Def., 583 U.S. 109, 138 S. Ct. 617, 631, 199 L.Ed.2d 501 (2018) ("Because the plain language of subparagraph (F) is 'unambiguous,' 'our inquiry begins with the statutory text, and ends there as well.' "); Matal, 582 U.S. at 232, 137 S.Ct. 1744 ("[O]ur inquiry into the meaning of the statute's text ceases when 'the statutory language is unambiguous and the statutory scheme is coherent and consistent.' " (quoting Barnhart, 534 U.S. at 450, 122 S.Ct. 941)). Because, here, the plain language of § 271(g) is clear and unambiguous, the judicial inquiry is complete, and the Court's job is at an end. See id.
Further, even if the Court were to review the legislative history, it is of no help to Shoreline. As Plaintiffs correctly note, during the legislative process, the provision that eventually became § 271(g) originally was limited to products "made in another country," but the provision was later expressly amended to remove that language. (See Doc. No. 186 at 5 (citing S. 1535, 98th Cong., 1st Sess. § 1 (1983); H.R. 6286, 98th Cong., 2d Sess. § 101(a) (1984)).) See also SGS-Thomson Microelectronics, 1994 WL 374529 (Table), at *10 (Plager, J., concurring) ("[T]he bills were either amended or reintroduced to eliminate the limitation."). In presenting the amended provision, the relevant House report states: "These [new] bills do not distinguish between products made using a patented process within the United States and those made outside the United States." H.R. Rep. No. 99-807, 99th Cong., 2d Sess., at 11 (1986). Further, "the Senate Judiciary Committee report [to the Process Patents Amendments Act of 1987] stated, 'the process patent bill was crafted to apply equally to the use or sale of a product made by a process patented in this country whether the product was made . . . in this country or in a foreign country.' " Momenta, 809 F.3d at 622 n.1 (Dyk, J., dissenting) (quoting S. Rep. No. 100-83, at 46 (1987)). As such, the legislative history supports interpreting § 271(g) to encompass both foreign-made products and domestically manufactured products. See id. (Dyk, J., dissenting) ("[T]he legislative history is clear that § 271(g) includes situations where the process is practiced in the United States.").
The Court acknowledges that the same Senate Judiciary Committee report also states: "the inclusion of domestic process patent infringement in the scope of a bill to extend protection to the products is regarded by the Committee as a formality to conform to the GATT, with little or no practical consequences in patent enforcement." S. Rep. No. 100-83, at 46. In addition, the Court acknowledges that the report further states: "the Committee does not expect or intend the bill to be used to sue purchasers of the product, when the infringing manufacturer can be sued instead." Id.; see also id. at 48 ("Since a process patentee can already prevent the use of the patented process by domestic manufacturers, the primary effect will be on foreign-made goods"); Bayer AG v. Housey Pharms., Inc., 340 F.3d 1367, 1375 (Fed. Cir. 2003) (" '[T]he primary target of the U.S. process patentholder will naturally be the manufacturer . . . . The 'manufacturer' [is] the 'preferred defendant because of its direct knowledge of the process.' " (emphasis added by Federal Circuit) (quoting S. Rep. 83-100 at 39-40)). But these statements at best render the legislative history ambiguous as to whether § 271(g) should apply in the present circumstances. The Supreme Court has explained that " 'ambiguous legislative history' cannot trump 'clear statutory language.' " Nat'l Ass'n of Mfrs., 138 S. Ct. at 634 n.9 (quoting Milner v. Department of Navy, 562 U.S. 562, 572, 131 S.Ct. 1259, 179 L.Ed.2d 268 (2011)); see Azar v. Allina Health Servs., — U.S. —, 139 S. Ct. 1804, 1814, 204 L.Ed.2d 139 (2019) ("[We] won't allow 'ambiguous legislative history to muddy clear statutory language.' " (quoting Milner, 562 U.S. at 572, 131 S.Ct. 1259)).
Finally, Shoreline makes policy arguments and contends that interpreting § 271(g) to encompass domestically manufactured products would dramatically expand the rights of process patent holders in ways Congress did not intend. (Doc. No. 181 at 8-9.) Shoreline asserts that interpreting § 271(g) to encompass domestically manufactured products essentially gives every process patent holder additionally a product or composition patent with "shadow claims" covering any products made by the claimed process. (Doc. No. 218 at 37-38, 52-53.) But there is evidence in the legislative history that this was indeed what Congress intended when it passed § 271(g). See S. Rep. No. 100-83, at 31 ("In order to make patent protection of a process meaningful, it is therefore necessary to consider the patented process and the resulting product as a whole, with the consequence that process protection is automatically extended to the resulting product even if the said product has not been claimed."); see also Zoltek Corp. v. United States, 672 F.3d 1309, 1323 (Fed. Cir. 2012) ("[T]he [Process Patents Amendments Act of 1987]'s legislative history . . . reflects the understanding that to protect process patents is to protect the products resulting from the process."). Further, even if the Court were to assume that Shoreline is correct that application of the plain and unambiguous language of § 271 provides some unintended consequences, the Supreme Court has explained: "When it comes to statutory interpretation, our role is limited to applying the law's demands as faithfully as we can in the cases that come before us. As judges we possess no special expertise or authority to declare for ourselves what a self-governing people should consider just or wise." Bostock, 140 S. Ct. at 1753. "The place to make new legislation, or address unwanted consequences of old legislation, lies in Congress," not the courts. Id.
In sum, by its plain and unambiguous terms, § 271(g) applies to both foreign-made products and domestically manufactured products. As such, the Court denies Shoreline's motion for summary judgment of no infringement of the asserted method patents under 35 U.S.C. § 271(g) on the basis that § 271(g) does not apply to domestically manufactured products, such as the Lonza iPSCs.
III. Shoreline's Affirmative Defense Under 28 U.S.C. § 1498(a)
Shoreline moves for summary judgment of its affirmative defense under 28 U.S.C. § 1498(a) as to Plaintiffs' claims for infringement under § 271(g) based on the Lonza line of iPSCs. (Doc. No. 146 at 11.) In the operative complaint to support their claims for infringement under § 271(g), Plaintiffs allege that "Lonza [Walkersville, Inc.] and/or other third parties make iPSCs using the process[es] patented in [the asserted method patents], and Defendants have purchased or otherwise obtained such iPSC lines that were created by Lonza and/or other third parties." (Doc. No. 162, Supp. FAC ¶¶ 213, 285, 358, 398; see also Doc. No. 197, Exs. B, D, F, G (Plaintiffs' infringement contentions).) Plaintiffs further allege that Defendants use these iPSCs "to make at least the iPSC-derived natural killer (NK) cell platforms." (Doc. No. 162, Supp. FAC ¶¶ 212, 284, 357, 397; see also Doc. No. 197, Exs. B, D, F, G.)
Shoreline argues that it is entitled to summary judgment on its § 1498(a) affirmative defense because Lonza manufactured the iPSCs at issue for the National Institute of Health ("NIH"), and the NIH provided Lonza with express authorization to use any patented process to make those iPSCs. (Doc. No. 146 at 1, 7-9.) Shoreline argues, therefore, that Lonza's manufacturing of the iPSCs at issue was "for the United States" under § 1498(a), and, thus, § 1498 bars Plaintiffs' § 271(g) infringement claims to the extent they are based on the Lonza line of iPSCs. (See id. at 7-11.) In response, Plaintiffs argue that Shoreline's assertion of an affirmative defense under § 1498 fails because it is based on a misunderstanding of the law and what is required to prove infringement under 35 U.S.C. § 271(g). (Doc. No. 161 at 1, 10-13.)
28 U.S.C. § 1498(a) provides:
Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without the license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.Section 1498 "creates an independent cause of action for direct infringement by the Government or its contractors." Zoltek, 672 F.3d at 1326-27. "For claims that fall within [§ 1498(a)]'s ambit, the remedy against the United States is exclusive." Arbutus Biopharma Corp. v. Moderna, Inc., No. CV 22-252, 638 F.Supp.3d 397, 405 (D. Del. Nov. 2, 2022) (citing Astornet Techs. Inc. v. BAE Sys., Inc., 802 F.3d 1271, 1277 (Fed. Cir. 2015)). "The 'intention and purpose of Congress' in enacting [§ 1498(a)] was 'to stimulate contractors to furnish what was needed' by the government, 'without fear of becoming liable themselves for infringements to inventors or the owners or assignees of patents.' " Id. at 404-05 (quoting Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 345, 48 S.Ct. 194, 72 L.Ed. 303 (1928)); see Zoltek, 672 F.3d at 1324; see also Leupold & Stevens, Inc. v. Lightforce USA, Inc., 449 F. Supp. 3d 1015, 1019 (D. Or. 2020) ("§ 1498(a) 'allows the Government to obtain what it needs from third parties, whether goods, services, or research, regardless of potential patent infringement, with compensation provided later to patent holders in a suit against the Government.' ") (quoting Madey v. Duke Univ., 413 F. Supp. 2d 601, 606 (M.D.N.C. 2006)).
Section 1498 provides an affirmative defense that "protects government contractors against infringement liability and remedies where it applies." Astornet, 802 F.3d at 1277; see Madey v. Duke Univ., 307 F.3d 1351, 1359 (Fed. Cir. 2002) (explaining that "§ 1498(a) is an affirmative defense" in an action for patent infringement "between private parties"). "The party raising the defense must establish that use of a patented invention was (1) 'for the Government;' and (2) 'with the authorization and consent of the Government.' " Leupold & Stevens, 449 F. Supp. 3d at 1019-20 (quoting Sevenson Env't Servs., Inc. v. Shaw Env't, Inc., 477 F.3d 1361, 1365 (Fed. Cir. 2007)); see Arbutus, 638 F.Supp.3d at 405-06.
"To qualify, the alleged use or manufacture must . . . be done 'for the benefit of the government.' " IRIS Corp. v. Japan Airlines Corp., 769 F.3d 1359, 1362 (Fed. Cir. 2014) (quoting Advanced Software Design Corp. v. Fed. Rsrv. Bank of St. Louis, 583 F.3d 1371, 1377 (Fed. Cir. 2009)). "A use is 'for the Government' if it is 'in furtherance and fulfillment of a stated Government policy' which serves the Government's interests and which is 'for the Government's benefit.' " Madey v. Duke Univ., 413 F. Supp. 2d 601, 607 (M.D.N.C. 2006) (quoting Riles v. Amerada Hess Corp., 999 F. Supp. 938, 940 (S.D. Tex. 1998)); accord IRIS, 769 F.3d at 1362. "Incidental benefit to the government is insufficient, but it is not necessary for the Government to be the sole beneficiary." IRIS, 769 F.3d at 1362 (quoting Advanced Software Design, 583 F.3d at 1378).
"A use is with the 'authorization and consent of the Government' where the Government either expressly or impliedly consents to the infringement." Madey, 413 F. Supp. 2d at 607; see IRIS, 769 F.3d at 1362 ("The government's authorization or consent may be either express or implied."). " 'When the Government provides express consent, that consent may be very broad, extending to any patented invention and any infringing use, or may be limited to only certain patented inventions or to only those uses that are necessary or are specifically consented to by the Government.' " Arbutus, 638 F.Supp.3d at 409 (quoting Madey, 413 F. Supp. 2d at 608); accord Saint-Gobain Ceramics & Plastics, Inc. v. II-VI Inc., 369 F. Supp. 3d 963, 971 (C.D. Cal. 2019).
Plaintiffs argues that Shoreline's assertion of an affirmative defense under § 1498 as to the Lonza line of iPSCs fails because it is based on a misunderstanding of infringement liability under § 271(g). (Doc. No. 161 at 1, 10-13.) The Court agrees with Plaintiffs. Shoreline's assertion of an affirmative defense under § 1498 is based on a misunderstanding of the standard for infringement liability under § 271(g) and how that standard interacts with § 1498(a).
In order to establish an affirmative defense under § 1498, Shoreline must demonstrate that" "(1) the use is 'for the Government'; and (2) the use is 'with the authorization and consent of the Government.' " Sevenson, 477 F.3d at 1365; see IRIS, 769 F.3d at 1362. The Federal Circuit has explained that "infringement liability under § 271(g) is not predicated on direct infringement of the patented process." Syngenta, 944 F.3d at 1361. Rather, infringement liability under § 271(g) is predicated on "importing, offering for sale, selling, or using a product." Id. at 1360 (citing 35 U.S.C. § 271(g)). As such, the relevant act of infringement (i.e., the relevant unauthorized "use" under § 1498(a)) with respect to Plaintiffs' claims for infringement under § 271(g) is not Lonza's manufacture of the iPSCs at issue. Rather, the relevant act of infringement is Shoreline's allegedly unauthorized use of the iPSC products at issue. See Zoltek, 672 F.3d at 1325 (For a claim of infringement under § 271(g), "it is the act of importation or use in the United States of the products made by the patented process that constitutes improper use of a patented invention" under § 1498(a). (emphasis in original)); id. at 1326 ("[F]or the purposes of section 1498, the use or importation 'within the United States [of] a product which is made by a process patented in the United States' constitutes use of the invention without lawful right because the products embody the invention itself.").
Thus, in order for Shoreline to have an affirmative defense under § 1498(a), Shoreline must show that its use of the Lonza line of iPSCs is " 'for the benefit of the government.' " IRIS, 769 F.3d at 1362 (quoting Advanced Software Design, 583 F.3d at 1377). And Shoreline must show that its use of Lonza line of iPSCs is conducted with the authorization and consent of the government. See id.; Sevenson, 477 F.3d at 1365. Shoreline does not assert anywhere in its motion for summary judgment that its use of the iPSCs at issue is for the benefit of the government or is conducted with the authorization or consent of the government. (See generally Doc. No. 146.) Rather, Shoreline only asserts that Lonza's manufacturing of the iPSCs at issue meets those requirements. (See Doc. No. 146 at 2-4, 7-9; Doc. No. 173 at 8-9 ("Shoreline's protection under Section 1498 is based on the undisputed fact that Lonza produced the Lonza line 'by or for the United States' under Section 1498").) But, as explained above, Lonza's manufacturing of the iPSCs is not the relevant act of infringement (i.e., the relevant unauthorized "use" under § 1498(a)) for Plaintiffs' § 271(g) claims. See Zoltek, 672 F.3d at 1325. Because Shoreline has failed to present the Court with any evidence or argument demonstrating that its use of the iPSCs at issue is for the benefit of the government or is conducted with the authorization and consent of the government, Shoreline has failed to demonstrate that it is entitled to an affirmative defense under § 1498(a) as to Plaintiffs' § 271(g) claims.
Further, Shoreline's reliance on the Federal Circuit's decision in Astornet Techs. Inc. v. BAE Sys., Inc., 802 F.3d 1271 (Fed. Cir. 2015), is misplaced. (See Doc. No. 146 at 10-11.) Astornet involved claims for induced infringement under 35 U.S.C. § 271(b). See 802 F.3d at 1277-78. A claim for induced infringement requires "an underlying act of direct infringement.' " Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337, 1355 (Fed. Cir. 2018) (" 'It is axiomatic that [t]here can be no inducement or contributory infringement without an underlying act of direct infringement.' ") (quoting In re Bill of Lading Transmission & Processing Sys. Pat. Litig., 681 F.3d 1323, 1333 (Fed. Cir. 2012)); see Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1322 (Fed. Cir. 2009) (" '[A] finding of inducement requires a threshold finding of direct infringement.' ") (quoting Ricoh Co. v. Quanta Computer Inc., 550 F.3d 1325, 1341 (Fed. Cir. 2008)). Because the underlying direct infringer in Astornet was the United States, specifically the Transportation Security Administration ("TSA"), the Federal Circuit held that § 1498 applied, and the Federal Circuit affirmed the dismissal of the plaintiff's claims for induced infringement. See Astornet, 802 F.3d at 1277-78. In contrast to a claim for induced infringement under § 271(b), a claim for infringement under § 271(g) is not predicated on an underlying act of direct infringement of a process claim. See Syngenta, 944 F.3d at 1361 ("§ 271(b)—predicates induced infringement liability on the existence of direct infringement . . . . By contrast, infringement liability under § 271(g) is not predicated on direct infringement of the patented process."). Rather, infringement under § 271(g) is a form of direct infringement. See id. at 1360 (acknowledging that § 271(g) involves a "form of direct liability"); United Gen. Supply, 2017 WL 524720, at *2 ("Patent infringement under Section 271(g) is a form of direct infringement."). As such, Arbutus is easily distinguishable from the present circumstances and is of no help to Shoreline.
Under § 271(g), the direct infringer at issue is whoever imports, offers to sell, sells, or uses "within this country . . . a product that was made by a process patented in the United States." Syngenta, 944 F.3d at 1359; see Zoltek, 672 F.3d at 1325, 1326. Under Plaintiffs' theory of infringement in this case, that is Shoreline, not Lonza. (See Doc. No. 162, Supp. FAC ¶¶ 212, 284, 357, 397; see also Doc. No. 197, Exs. B, D, F, G.) And because Shoreline is the relevant direct infringer, Shoreline must show that its allegedly unauthorized use of the invention is for the benefit of the government and with the authorization and consent of the government. See Zoltek, 672 F.3d at 1325, 1326; IRIS, 769 F.3d at 1362; Sevenson, 477 F.3d at 1365. Shoreline has failed to do so.
In sum, Shoreline has failed to demonstrate that it is entitled to an affirmative defense under § 1498(a) as to Plaintiffs' claims for infringement under § 271(g) related to the Lonza line of iPSCs. As a result, the Court denies Shoreline's motion for partial summary judgment of its § 1498(a) affirmative defense.
Conclusion
For the reasons above, the Court denies Shoreline's motion for partial summary judgment.
IT IS SO ORDERED.